In Granholm v. Heald, the Supreme Court held that states must treat in- state and out-of-state alcoholic beverages equally under the dormant Commerce Clause and established a heightened standard of review for state alcohol laws. Yet in dictum the Court acknowledged that the three-tier distribution system—a regime that imposes a physical presence requirement on alcoholic beverage wholesalers and retailers—was “unquestionably legitimate.” Though the system’s physical presence requirement should trigger strict scrutiny, lower courts have placed special emphasis on Granholm’s dictum, refusing to subject the three-tier distribution system to Granholm’s heightened standard of review. This Note argues that the dictum should be discarded and that courts should carefully scrutinize the three-tier distribution system. Under Granholm’s heightened standard of review, the three-tier distribution system would be found unconstitutional.

But that doesn’t do this text justice. Murphy’s analysis of Granholm, the dormant Commerce Clause, the history of the three-tier system, and the case law interpreting states’ rights to regulate and restrict the activities of wholesalers and retailers under the 21st Amendment is the predicate for an enlightening argument on the application of strict scrutiny to the three-tier system and for the end of a thoughtless acquiescence to the “unquestionably legitimate” dicta that many lower courts acknowledge and apply.

Even non-legal readers will find this Note’s explanation of the three-tiered system and commentary on recent court rulings accessible.